Credit insurer reduces cover for THG suppliers - report
Troubled online beauty/nutrition retailer THG can now add another problem to its list of woes. Credit insurer Allianz Trade has reduced cover to its suppliers, reports claim.
It is understood Allianz informed THG’s suppliers of its decision in recent weeks, although it continues to provide cover for them, alongside other credit insurers.
But is the news as bad as it seems? Sources close to THG told The Guardian the reduction in cover was “small” compared with its overall level of credit insurance, reflecting cover that was unused by suppliers and has no bearing on THG’s financial position.
THG and Allianz Trade have declined to comment.
Credit insurance is a key way to protect suppliers against the risk of retailers placing orders and being unable to pay for them. Without it, suppliers are more likely to want payment upfront, putting pressure on a retailer’s cashflow.
Other big names to see credit insurance cuts this year include ASOS, Ted Baker and Boohoo.
Whether it’s a major problem or not, the reduction adds to the pressure on THG founder and chief executive, Matt Moulding, who has seen the value of the business plunge. Since floating in September 2020, its value has plummeted from more than £5 billion to £667 million with the share price having fallen 93% to just 53p.
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